James Emejo in Abuja
It emerged Monday that revenue agencies do not bother to investigate and confirm claims on crude oil production and sale by the Nigerian National Petroleum Corporation ((NNPC).
At the resumed hearing of the ad-hoc committee investigating the $17 billion undeclared oil and gas proceeds between 2011 to 2014, which is chaired by Hon. Abdulrazak Namdas, the committee was baffled by revelations that none of the agencies including the Central Bank of Nigeria (CBN), Nigeria Customs Service (NCS) and the Federal Inland Revenue Service (FIRS) deemed it necessary to verify NNPCâ€™s revenue remittances against actual crude oil lifting and sale.
The Governor of the Central Bank of Nigeria (CBN), Mr.. Godwin Emefiele, told the committee that the apex bank only warehouses oil proceeds in its crude oil account with J. P Morgan Chase in New York and do not monitor revenue agencies to determine what ought to be paid and what was actually remitted.
He also said the apex bank currently operates only one crude oil account for the NNPC.
Represented by CBN acting Director, Mr. Jack Ukitetu, the governor said the CBN was not in a position to explain crude oil sales, adding that relevant agencies should be in a better position to know the procedures and what ought to be remitted to government coffers.
His response stemmed from a question put to him by the committee on whether the bank was involved in any form of reconciliation with revenue agencies to ensure that what ought to come to the federation account is what is actually paid.
The committee also needed to establish the role of the bank in managing the oil accounts in terms of disbursement authorisation.
However, Emefiele further clarified that the CBN do not authorise disbursements from the federation accounts and currently donâ€™t charge any commission on revenue items or any government deposit within its vault.
Noting that the apex bank is required to honour payment mandates whenever issued by the corporation or other agencies, he said it was not in a position to ask the NNPC for actual oil quantity in relation to remittances into the oil account.
But NNPC Chief Operating Officer, Mr. Bello Rabiu, contrary to the apex bankâ€™s submission, said there are monthly reconciliatory meetings among the agencies of government including the CBN, particularly at the level of the Federation Accounts Allocation Committee (FAAC).
He said NNPC had often informed the FIRS of projected revenue earnings from crude oil sales for the purpose of taxation.
Namdas, therefore, requested that copies of such correspondence be made available at the next hearing.
Part of the committeeâ€™s focus is on unraveling crude oil liftings which were never reported by the NNPC but captured in a third party account being investigated.
About $15 billion is already reported as shortfall in crude oil sales between 2011 and 2014.
Nonetheless, the submission by the Customs representative was further appalling.
The Service told the gathering that its estimates on crude oil lifting and certification was based only on declared products which are often captured in the service computer system.
He told the committee that the service do not have the resources to be physically present at product loading points or jetties and would only rely on the discretion or disposition of oil companies to transport the customs to supervise oil activities.
In effect, should the companies decide not to engage the customs in any particular operations, the service will be unaware of the volume of lifting that took place.
It further goes to show how convenient it could be for oil activities to be compromised.
â€œWe are not permanently present at loading platforms. The service is severely constrained in the discharge of its function. However, we donâ€™t issue clearance to any cargo we didnâ€™t participate in,â€ the customs submitted.
Meanwhile, Deputy Director, Tax Policy Department, FIRS, Mr. Gabriel Ogunjemilusi, said tax oil is determined solely by the advise given to the service by NNPC without independent investigation to ascertain the actual volume of oil transactions.
His submission showed that there are no measures to verify what the NNPC throws at the service to guide in more accurate tax calculations.
Ogunjemilusi said NNPC only is in charge and merely provided information to the FIRS, adding that the Act setting up the agency only empowered it to enforce compliance.
But the committee disagreed with him and read out portions of the FIRS Act which purportedly vested enormous power in the service to investigate activities of companies and agencies whenever relevant.
Namdas said depending on the NNPCâ€™s information on lifting was not helpful as there are discrepancies in the corporationâ€™s account compared to that of the Nigerian Navy and customs.
It was temporarily concluded that the agencies lacked the guts to hold NNPC for actual crude liftings and sale.